U.S. livestock: CME live cattle mixed on better-than-expected cash prices

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed mixed on Friday after preliminary cash prices beat early-week expectations, lifting contracts from session lows, traders said.

Spot October finished down 0.4 cent/lb. at 130.775 cents, and December was 0.35 cent lower at 137.325 (all figures US$). February finished up 0.225 cent at 139.4 cents, and April was 0.35 cent higher at 139.1.

On Friday afternoon, a small number of market-ready (cash) cattle in the U.S. Plains sold at $126-$127/cwt, compared with last week’s sales of mostly $118 to $124, feedlot sources said.

Reduced cattle weights this week suggest packers are close to cleaning up excess heavyweight cattle that had recently dragged down cash and wholesale beef values, traders and analysts said.

While some saw periodic spikes in beef cutout values this week as a sign that the seasonal lull in beef demand has ended, others anticipate further challenges from competing meat proteins in the near term.

“We’ll see some beef features come the Christmas holiday, but pork and chicken are still so much cheaper,” said A+A Trading Inc broker Jim Clarkson.

Friday morning’s wholesale choice beef price, or cutout, dropped 64 cents/cwt from Thursday to $202.97. Select cuts were up 47 cents at $197.93, the U.S. Department of Agriculture said.

Despite the appearance of a seasonal bottoming of cash prices, futures remained at a premium to cash, which might result in more deliveries against the October contract on Monday, the traders and analyst said.

CME feeder cattle futures closed higher, strengthened by lower corn futures and late-session back-month live cattle market gains.

October feeder cattle ended 1.1 cents/lb. higher at 188.975 cents.

Hogs slip late

Ample supplies pressured cash and wholesale pork prices, which weighed on CME lean hogs near the close, traders said.

Spot October lean hogs, which will expire on Oct. 14, settled 0.175 cent/lb. lower at 73.825 cents, and December was down 0.025 cent at 66.125 cents.

USDA quoted the morning’s wholesale pork price at $88.34/cwt, 48 cents lower than on Thursday, mostly pressured by $2 lower loin costs.

The government reported Friday morning’s average cash hog price in the Iowa/Minnesota market at $71.74/cwt, $1.28 lower than on Thursday, in light volume.

Losses were minimized by the discounts of CME lean hog futures to the exchange’s hog index for Oct. 7 at 74.75 cents.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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